Oil & Gas

Some countries missing oil cut targets, says Opec

February 14, 2024, 2:29 PM

Workers at an oil refinery in Kerbala. Iraq cut about a third of the amount needed to meet its voluntary output target

Production down 350,000 bpd
Geopolitical risk supports prices
Demand forecast unchanged

Crude production by Opec fell by 350,000 barrels per day (bpd) in January, as members of the wider Opec+ group started implementing voluntary output cuts, the oil bloc said in its monthly report published this week.

Some countries did not adhere to the pledged amounts, complicating Opec’s efforts to stabilise global oil prices.

Kuwait and Algeria implemented their share, while Iraq cut about a third of the amount needed to meet the target. It produced over 4 million bpd, according to secondary sources.

Earlier, Iraq said it was complying with its pledges.

Oil prices have been supported by geopolitical risk in the Middle East, gaining around 6 percent in one month. Brent crude was trading at over $83 a barrel on Wednesday.

Opec’s forecast for global oil demand growth in 2024 remained unchanged from last month’s assessment of 2.2 million bpd, reaching around 104 million bpd.

The group upgraded its forecast for the US economy, which has a positive impact on oil demand. However, this would be offset by the downward projections for OECD nations and Europe.

In non-OECD nations, oil demand will be driven by China and supported by the Middle East. Global air travel recovery and healthy petrochemical feedstock requirements would be key for oil demand in 2024, Opec said.

The group lowered its 2024 forecast for growth in non-Opec liquids production by 150,000 bpd to 1.2 million bpd.

The US, Canada, Guyana, Brazil and Norway are expected to be the main drivers of growth. A decline in output from Russia, Mexico and Angola is forecast.